Knowledge Center

China's recent emergence as a preeminent innovator in the science and technology sectors has come as a bit of a sting to many of the world's top economies and innovative powers.

However, many analysts are misreading the country's evolution as being indicative of stalled innovation on the part of the U.S., Germany or Japan, when in fact the enormous growth stems merely from China's low point of departure – a trend that has led many to confuse growth rates with innovation itself.

"China seems to have hit its stride after sprinting over the last few decades to catch up," writes Jeremy Hsu for Business News Daily. "And much evidence shows it is still trying to translate the sheer quantity of published papers and patent filings into quality products and services."

The world's second-largest economy is already expected to surpass the U.S. in patent filings by 2011. In 2009, China became the second largest contributor of articles to international science journals.

But, once again, these figures do not directly quantify innovation. While it is true that China has emerged as a global powerhouse in science and technology, on top of being the world's largest manufacturer, innovation remains difficult to measure.

As Mark Boroush, a senior analyst at the National Science Foundation said: "Innovation is a very complex phenomenon that doesn't boil down to a single number."

Innovation Processes and Management

To add to the intensifying battle between U.S. phone manufacturers for control of the smartphone market, Motorola is counter-suing Microsoft, alleging the tech company's personal computer, server, mobile phone and Xbox products infringe on 16 different Motorola patents.

Last month, Microsoft sued Motorola over infringements stemming from the Illinois-based phone maker's Android operating platforms. Apple has also filed complaints against Motorola with the U.S. International Trade Commission, as well as a separate suit against HTC – another Android-based phone manufacturer.

As the ITC investigates Microsoft's complaints and Motorola requests compensation for infringements, others are questioning what, if anything, the patent wars are accomplishing.

"This is [about] more than just making a competitor lose sales, but also about making a heavy profit," writes Mobile Deals Compared, a mobile industry commentator. "Even a payoff of a small amount per handset would equate into an incredibly large sum. Add to this equation that patent lawsuits do not target a specific device, but a specific technology that might be used in a series of handsets."

However, the lawsuits do not reflect merely a quest for revenue, so much as a quest for market share in a fledgling but highly lucrative industry.

With the number of smartphone patent lawsuits reaching double digits, many top brands are adopting IP management technologies to help ensure protection of their intellectual assets.

Commercialization and Licensing Processes and Mana

The U.S. Patent and Trademark Office announced Wednesday it is extending a green technology incentive program aimed at spurring continued innovation in the renewable energy industry.

The program, which was launched in December of 2009, expedites the review process of patent and trademark applications meant to reduce carbon emissions or improve the environment. Such green tech inventions have benefited from an average 49-day review process, as opposed to the usual duration of up to two years for other patent applications.

Since the initiative began, the USPTO has approved 790 petitions and 79 patents. Wednesday's announcement declared that the program will be extended until December 31, 2011.

"We’ve seen great results so far for those applications in the green tech program," director David Kappos told Bloomberg. "By doing so, we hope to help bring more green inventions to market, stimulate investment in green technology and create jobs."

The extension will also provide the agency with more time to reach its goal of 3,000 green tech patent applications, creating an incentive for intellectual assets in the industry. The Obama administration is encouraging investment and aid for emerging renewable energy markets as a means to compete with markets such as China and India, and reduce reliance on oil.

Commercialization and Licensing Processes and Management, Innovation Processes and Management

In an effort to expand its global operations, General Electric has announced plans to invest $2 billion to promote innovation, entrepreneurship and partner development in China.

According to a statement released by GE on Tuesday, approximately $500 billion will be vested in research and development and new innovation, while the remaining $1.5 billion will be allocated to new Chinese tech ventures.

GE Chairman and CEO Jeff Immelt asserts that the investment in China will also help the United States, as the two nations share many economic interests.

"China is the world's fastest-growing market for aviation, energy, transportation, healthcare and financial services," said Immelt. "The commitments we are announcing today will bring GE's technology and innovation strengths to help meet these growth challenges in China. These initiatives will create jobs in both China and the United States."

The report comes a day after Jeff Rice took over as head of global operations at GE. Already, Rice has announced intentions to promote innovation R&D within emerging tech markets in countries and regions such as China, the Middle East, India and Brazil.

In addition to GE's investment in China, President Barack Obama pledged this week to promote innovation and technological development in India during his trip to the country, adding that the relationship between the world's two largest democracies "will be one of the defining partnerships of the 21st century."

Innovation Processes and Management

As an effort to boost small business growth and innovation in the emerging London tech industry, the United Kingdom has announced the beginning of a large-scale review of intellectual property and copyright laws.

In addition to initiating a large-scale campaign to bring entrepreneurs and investors to London's East End, Prime Minister David Cameron announced last week that a comprehensive copyright and IP law review is necessary to bring UK innovation into the 21st century.

The review will assess the cost and difficulty of enforcing intellectual property rights, as well as their effect in spurring small business development.

"Copyright legislation dating from the late 1980’s is not what you want in the internet age," said Daniel Milnes, Intellectual Property Solicitor at Forbes Solicitors.

However, others argue that the prime minister's campaign is futile, as it will likely contradict or oppose a number of European Union regulations.

"The focus is apparently to be on fair use defences, in other words what types of uses of copyright works should be allowed without having to get the rights-owner’s permission," said Mark Owen, a prominent UK IP lawyer. "These are largely dictated by EU law, and the UK has little room to maneuver on them."

Intellectual Property Activities and Management

In response to recent reports on internet neutrality put forth by the Federal Communications Commission, the Internet Innovation Alliance – a business and nonprofit coalition advocating open broadband access – released a statement pleading the FCC and the U.S. government to adopt necessary measures to ensure the continuation of widespread unbiased internet service.

Open broadband networks that do not regulate bandwidth or services according to an ISP's interests are necessary for continued innovation, the IIA claims. The organization argues that net neutrality is a cornerstone of web innovation and, consequently, economic viability.

"The last thing we need is new regulations that threaten one of the few bright spots for growth: the broadband economy," said IIA co-chairman David Sutphen. "Now is the time to turn the page on net neutrality and focus attention on the issues like universal service fund reform, digital literacy programs and innovation policy, all of which will help to ensure that every American is benefiting from the broadband economy."

The FCC currently estimates the need for $350 billion in additional investment in order to achieve the goal of "100 percent broadband availability at speeds that enable the next generation of innovative applications."

Although such an investment is a high price amid a stalled economy and a massive national deficit, proponents of internet neutrality believe it is necessary for continued innovation in the broadband world.

Innovation Processes and Management

Google and the U.K. government provided an outline Thursday to turn London's East End into a hub of technological innovation meant to rival Silicon Valley in California. Google announced in a separate statement that the tech and software giant will open up a training and development center in the blossoming London neighborhood.

"We haven't proposed anything quite like this in Europe," a Google spokesman told AFP.

The "innovation hub" will host workshops and product demonstrations for entrepreneurs and tech startups, as well as provide a location for Google employees to coordinate with local innovation and IP developers.

Prime Minister David Cameron will propose a new visa for foreign entrepreneurs and VCs looking to invest in the growing London tech industry. Intel, Facebook and Cisco have also announced plans to help develop the area.

Mr. Cameron hopes to create an environment in London that will compare to the relatively lax logistical and regulatory atmosphere enjoyed by U.S. entrepreneurs and innovators.

"The founders of Google have said they could never have started their company in Britain," the Prime Minister said in a speech Thursday. "The service they provide depends on taking a snapshot of all the content on the internet at any one time, and they feel our copyright system is not as friendly to this sort of innovation as it is in the United States."

Still, with growing concerns over innovation management and protection, even the most coveted American tech ventures are seeking means to protect their ideas and intellectual property.

Innovation Processes and Management

Spending on research and development among the world's top investors in innovation dropped in 2009 for the first time in 13 years, according to a new study by the consulting firm Booz & Company. Among the 1,000 global companies that consistently spend the most on innovation research and development, total investment dropped 3.5 percent to $503 billion in 2009.

Likewise, revenue from innovations among the same companies fell 11 percent from $15.1 trillion to $13.4 trillion.

"It's no surprise that the worldwide recession finally caught up with the world's top innovation spenders in 2009, causing them to trim their innovation budgets," said Barry Jaruzelski, a partner at Booz & Company. "However, the relatively modest cuts in R&D spending compared to much larger declines in revenues demonstrates the continued importance of innovation as a critical component of corporate strategy to companies in every industry."

The study also found that more than half of companies surveyed cut their spending on R&D in 2009 – almost all of which came from the automotive, electronics and manufacturing industries, with auto claiming the greatest dip in spending.

The study comes days after CEOs from Google, Alcoa, Coca Cola and IBM urgently pressed the U.S. to invest in innovation development and education. Citing the growing influence of manufacturing-based nations, the executives' remarks, along with the report from Booz & Co., highlight how vital it is for companies and innovators to manage their inventions and intellectual property.

Innovation Processes and Management

CEOs from a number of leading American corporations jointly confirmed Sunday the need for the U.S. to invest in education and innovation in order for the country to remain a worldwide market competitor.

Appearing on the CNN show Fareed Zakaria GPS, the CEOs of Google, Coca Cola, IBM and Alcoa cited the increasing dominance of low-cost industrial nations such as China and India as a threat to America's dominance in innovative technologies. To combat the rising threat, the corporate leaders argued that the U.S. should spend more on innovation research, development and education.

"The real problem we have now is we have other countries that are copying us – Singapore, Korea, China and so forth, that have very directive industrial policies around sectors," said Google CEO Eric Schmidt.

The CEOs maintained that the U.S. still holds its place as the torchbearer for entrepreneurship, patent filings and innovative technologies – referencing post-World War II innovation as an ideal complex of government-industrial policy.

"America and the American dream are still very much alive. The foundation is there," said Alcoa CEO Klaus Kleinfeld. "Currently we have a scientific revolution going on like we have not seen before."

The sense of national urgency the business leaders are pushing for has been reflected in a flourishing of new information technologies designed to manage innovation and intellectual property.

Innovation Processes and Management

In what some critics are calling an attempt to further control the smartphone market, Apple announced last week that it is suing Motorola over alleged patent infringements regarding the tech giant's iPhone mobile software.

Referencing specific IP violations regarding the iPhone's touch screen and user interface, Apple filed suit against Motorola's Droid, Cliq and Backflip mobile technologies, among others.

Court documents filed Friday claim Apple has patents on "smartphones and associated software, including operating systems, user interfaces, and other application software designed for use on, and loaded onto such devices."

However, according to PC World, Apple's touchscreen patent only covers the way in which the phone can determine scrolling and zoom intentions by the angle or movement of the user's fingers.

In light of the announcement, many are questioning Apple's basis for the lawsuit.

"(A victory) means that Apple will rule the world not on the basis of coming up with unique ideas, but for ruthlessly exploiting the bizarre U.S. patent system," wrote Nick Farrell for the Inquirer. "Of course it is doubtful that Apple ever had an original idea."

In 2006, Motorola was the second-largest cell phone manufacturer, but after the emergence and popularity of smartphones, the company's market share dropped significantly. Currently, it is the seventh-largest mobile phone maker in the world.

Intellectual Property Activities and Management